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Monno Ceramic Industries Ltd.

AUDITORS’ REPORT TO THE SHAREHOLDERS

We have audited the accompanying Statement of Financial Position of MONNO CERAMIC INDUSTRIES

LIMITED as of June 30, 2015 and the related Statement of Comprehensive Income, Statement of Changes in Equity

and Statement of Cash flows together with the notes for the year then ended and a summary of significant accounting

policies and other explanatory notes.

Management’s responsibility for the financial statements:

Management is responsible for the preparation and fair presentation of these financial statements in accordance with

Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS), the Companies

Act 1994 and other applicable laws and regulations. This responsibility includes designing, implementing and

maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from

material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies and

making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit

in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with relevant

ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements

are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on our judgment, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we

consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order

to design audit procedures that are appropriate in the circumstances, but not for the purpose of expression an opinion

on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of

accounting principles used and the reasonableness of accounting estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion:

In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS), give

a true and fair view of the state of the Company’s affairs as of June 30, 2015 and of the results of its operations and

it’s cash flows for the year then ended and comply with the applicable section of the Companies Act, 1994, the

Securities and Exchange Rules, 1987 and other applicable laws and regulations.

We report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit and made due verification thereof;

b) In our opinion, proper books of account as required by law have been kept by the company so far as it appeared

from our examination of those books;

c) The company’s Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in

Equity and Statement of Cash flows dealt with by the report are in agreement with the books of accounts; and

d) The expenditure incurred was for the purposes of the company’s business.

SD/-

Dhaka, (A. WAHAB & CO.)

Dated : October 27, 2015 CHARTERED ACCOUNTANTS


STATEMENT OF FINANCIAL POSITION

AS AT JUNE 30, 2015 (Amount in Taka)

Particulars Notes 30.06.2015 30.06.2014

ASSETS NON-CURRENT ASSETS 2,267,282,507 2,274,486,284 Property, Plant and Equipment - At cost Less Depreciation 11.00 2,154,086,548 2,161,290,325

Investments 12.00 113,195,959 113,195,959

CURRENT ASSETS 783,381,023 793,939,068

Inventories 13.00 333,780,837 347,164,704

Trade & other Receivables 14.00 142,648,497 146,096,915

Advance, Deposits & Pre-payments 15.00 297,895,682 271,192,189

Cash and cash Equivalents 16.00 9,056,007 29,485,260

TOTAL ASSETS Taka 3,050,663,530 3,068,425,352

EQUITY AND LIABILITIES SHAREHOLDERS’ EQUITY 2,275,832,775 2,277,808,859

Issued and Paid-up Share Capital 17.01 239,280,200 239,280,200

Revenue Reserve & Surplus 18.00 2,036,552,575 2,038,528,659

NON-CURRENT LIABILITIES 11,863,330 17,772,138

Long Term Loan (Secured) 19.00 - 4,734,152

Deferred Liability 20.00 11,863,330 13,037,986

CURRENT LIABILITIES 762,967,425 772,844,355

Short Term Borrowings 21.00 430,469,590 376,786,535

Long Term Loans (Current portion) 22.00 2,311,589 16,744,000

Trade & other Payables 23.00 101,689,557 120,402,375

Accrued Expenses 24.00 20,771,388 24,619,082

Unclaimed Dividend 25.00 11,699,095 10,421,553

Provision for Income Tax (Current & deferred) 26.00 28,130,724 26,489,909

Liabilities for other Finance 27.00 167,895,482 197,380,901 TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES Taka 3,050,663,530 3,068,425,352

Net Assets Value per share 95.11 95.19

The annexed notes from 01 to 49 form an integral part of the financial statements.

Approved and authorized for issue by the Board of Directors on October 27, 2015 and signed for

and on behalf of the Board.

SD/- SD/- SD/-

MD.EKRAMUL HOQUE AFROZA KHAN H. R. KHAN Subject to our separate report

COMPANY SECRETARY MANAGING DIRECTOR CHAIRMAN of even date.

SD/-




STATEMENT OF COMPREHENSIVE INCOME For the year ended June 30, 2015

Amount in Taka

Particulars Notes 30.06.2015 30.06.2014 Net Revenue 28.00 757,385,343 692,427,630

Cost of Goods Sold 29.00 (617,334,682) (546,208,372)

Gross Profit 140,050,661 146,219,258

Operating Expenses (84,313,319) (76,899,954)

Administrative Expenses 30.00 (47,454,061) (42,461,414)

Selling and Distribution Expenses 31.00 (36,859,258) (34,438,540) Profit from Operations 55,737,342 69,319,304

Finance cost 32.00 (50,790,590) (65,608,938)

Net Profit Before Contribution to WPPF 4,946,752 3,710,366

Contribution to WPPF & WF 33.00 (235,560) (176,684)

Net Profit Before Tax 4,711,192 3,533,682

Income Tax Provision (Current & deferred) 26.00 (1,640,815) (989,293)

Net Profit after Tax Taka 3,070,377 2,544,389

Basic Earnings per share (Par value Tk.10.00) 34.00 0.13 0.11




SD/- SD/- SD/-


COMPANY SECRETARY MANAGING DIRECTOR CHAIRMAN of even date.

SD/-




STATEMENT OF CHANGES IN EQUITY

For the year ended June 30, 2015

For the Year-2013-2014 (Amount in Taka)

Particulars Share

capital

Dividend

equalisation

reserve

General

reserve

Capital

Reserve

Revaluation

Surplus

Retained

Earning

Proposed

Dividend

Total

Balance, July 01, 2013 239,280,200 21,700,000 149,491,999 9,081,550 1,817,737,370 66,036,592 5,046,460 2,308,374,170

Transferred to Dividend

Payable

-

-

-

-

-

-

(5,046,460)

(5,046,460)

Depreciation on Revaluation

of Assets

-

-

-

-

(28,063,240)

-

-

(28,063,240)

Net Profit for the year - - - - - 2,544,389 - 2,544,389


Payable

-

-

-

-

-

(5,046,460)

5,046,460

-

At the end of the year 239,280,200 21,700,000 149,491,999 9,081,550 1,789,674,130 63,534,521 5,046,460 2,277,808,859

For the Year-2014-2015 (Amount in Taka)

Particulars Share

capital

Dividend

equalisation

reserve

General

reserve

Capital

Reserve

Revaluation

Surplus

Retained

Earning

Proposed

Dividend

Total

Balance, July 01, 2014 239,280,200 21,700,000 149,491,999 9,081,550 1,789,674,130 63,534,521 5,046,460 2,277,808,859


Payable

-

-

-

-

-

-

(5,046,460)

(5,046,460)

Depreciation on Revaluation

of Assets

-

-

-

-

(26,787,266)

26,787,266

-

-

Net Profit for the year - - - - - 3,070,377

- 3,070,377

At the end of the year 239,280,200 21,700,000 149,491,999 9,081,550 1,762,886,864 93,392,163 - 2,275,832,776




SD/- SD/- SD/-


COMPANY SECRETARY MANAGING DIRECTOR CHAIRMAN of even date annexed.

SD/-




STATEMENT OF CASH FLOWS For the year ended June 30, 2015

Amount in Taka

Particulars Note 30.06.2015 30.06.2014

Cash Flows from Operating Activities: (11,196,197) 36,325,049

Cash Receipts from Customers and Others 760,833,761 719,230,195

Cash Paid to Suppliers, Employees and others (724,168,212) (628,116,747)

Interest Paid (47,861,746) (54,788,399)

Cash Flows from Investing Activities (38,805,974) (6,847,113)

Acquisition of Property, Plant and Equipment (38,805,974) (6,847,113)

Cash Flows From Financing Activities: 29,572,918 (23,785,243)

Decrease in Long Term Borrowings (19,166,563) (14,575,216)

Increase/ (Decrease) in Short Term Borrowings 53,683,055 (5,390,432)

Dividend Paid (3,768,918) (3,668,592)

Deferred Liability (1,174,656) (151,003)

--------------- ---------------

Increase/(Decrease) in cash & cash equivalents (20,429,253) 5,692,693

Cash and Cash Equivalents at Beginning of year 29,485,260 23,792,567

-------------- --------------

Cash and Cash Equivalents at end of year 16.00 9,056,007 29,485,260

======== ========

Net operating cash flows per share (0.47) 1.52


Approved and authorized for issue by the board of directors on October 27, 2015 and signed for


SD/- SD/- SD/-


COMPANY SECRETARY MANAGING DIRECTOR CHAIRMAN of even date annexed.

SD/-




Notes to the Financial Statements As at and for the year ended June 30, 2015

1.00. Corporate History of the Reporting Entity

Monno Ceramic Industries Limited (The Company) was incorporated in Bangladesh on 21st

April, 1981 as a Public Limited Company under The Companies Act, 1913. The Company

went for public issue of shares in 1985 and its shares are listed with the Dhaka Stock

Exchange Limited & Chittagong Stock Exchange Limited since 1983 and 1995.

The principal place of business of the company and its registered office and the factory is

situated at Islampur, Dhamrai, Dhaka-1350.

2.00. Corporate Business

The Company owns and operates modern ceramic wares factory and produces high quality

Porcelain tableware products and sells them in the local as well as International Markets.

3.00. Corporate Financial Statements and Reportings

Financial statements which comprise Statement of Financial Position as of June 30, 2015

and Statement of Comprehensive Income, Statement of Changes in Shareholders Equity

and Statement of Cash Flows for the year then ended, and a summary of significant

accounting policies and other explanatory notes.

Financial statements are prepared under the historical cost convention and in accordance

with the requirements of the Companies Act 1994, the Securities and Exchange Rules

1987, the Listing Regulations of Dhaka and Chittagong Stock Exchanges and the

International Accounting Standards (IASs) adopted by the Institute of Chartered

Accountants of Bangladesh (ICAB) as well as those standards, disclosures recommended

by BASs and as applicable to this company.

The Management of the Company primarily responsible for the preparation and

presentation of the financial statements including adequate disclosures. The Board of

Directors approved and authorized for issue of these financial statements.

The preparation of financial statements in conformity with Bangladesh Accounting

Standards requires Board of Directors to make estimates and assumptions that affect the

reported amounts of revenues and expenses, assets and liabilities at the date of the

reporting period. Due to the inherent uncertainty involved in making estimates, actual

result reported could differ from those estimates.

4.00. Fundamental Accounting Concepts/Assumption

The financial statements have been prepared based on Going concern, Consistency

concept, Accrual concept and such other convention as required by BAS-1 for fair

presentation of financial statements.


5.00. Corporate Accounting Standards Practiced

The Following BASs are applied for the preparation for the financial statement

BAS 1 Presentation of Financial Statements

BAS 2 Inventories

BAS 7 Cash Flow Statements

BAS 8 Net Profit or Loss for the period, Fundamental Errors and Changes in Accounting Policies

BAS 10 Events after the Balance Sheet Date

BAS 12 Income Taxes

BAS 16 Property, Plant and Equipment

BAS 17 Leases

BAS 18 Revenue

BAS 21 The effects of Changes in Foreign Exchange Rates

BAS 23 Borrowing Costs

BAS 24 Related Party Disclosures

BAS 25 Accounting for Investments

BAS 28 Accounting for Investment in Associates

BAS 33 Earnings Per Share

BAS 36 Impairment of Assets

BAS 37 Provisions, Contingent Liabilities and Contingent Assets

6.00. Related Party Transactions

All the related party transactions have been accounted for, considering these on arms

length basis, the details of which are disclosed in Note 36.

7.00. Reporting Currency and Level of Precision

(a) The financial statements are presented in Bangladesh currency (Taka), which have

been rounded off to the nearest Taka except where indicated otherwise.

(b) Figures in brackets indicate negative balance.

8.00. Comparative Amounts

Wherever necessary, figures of the prior year have been re-arranged to conform with the

current year’s presentation as required by BAS-1.

9.00. Historical Cost Profit and Losses

There was no revaluation of fixed assets in previous year and during the year under audit.

Therefore, there was no factor like the differences between historical cost depreciation

and depreciation on revalued amount, realization of revenue surplus on retirement or

disposal of assets, etc. Accordingly, no separate note of historical cost profit and loss has

been presented.


10.00. Principal Accounting Policies

The specific accounting policies selected and applied by the Company’s directors for

significant transactions and events that have material effect within the framework of BAS 1

“Presentation of Financial Statements”, in preparation and presentation of financial

statements have been consistently applied throughout the year and were also consistent

with those used in earlier years.

For a proper understanding of the financial statements, these accounting policies are set

out below in one place as prescribed by the BAS 1 “Presentation of Financial

Statements”. The recommendation of BAS-1 relating the format of financial statements

were also taken into full consideration for fair presentation.

10.01. Recognition of Tangible Fixed Assets

These are capitalized at cost of acquisition and subsequently stated at cost less

accumulated depreciation. The cost of acquisition comprises of purchase price, including

import duties and non-refundable Taxes and any directly attributable cost of bringing the

assets to its working condition for its intended use. Expenditure incurred after the assets

have been put into operation, such as repairs & maintenance is normally charged off as

revenue expenditure in the period in which it is incurred. In situation where it can be

clearly demonstrated that the expenditure has resulted in an increase in the future

economic benefit expected to be obtained from the use of the fixed assets, the expenditure

is capitalized as an additional cost of the assets.

On retirement or otherwise disposal of fixed assets, the cost and accumulated

depreciation are eliminated and any gain or loss on such disposal is reflected in the

Income Statement which is determined with reference to the net book value of assets and

the net sales proceeds.

Fixed assets which are yet to be certified for operation, have been kept as Capital

Work-in-progress.

10.02. Depreciation of Tangible Fixed Assets

No depreciation is charged on land and land development and capital work in progress.

Depreciation on all other fixed assets is computed using the reducing balance method.

After considering the useful life of assets as per BAS-16, the annual depreciation rates

have been applied as under, which is considered reasonable by the management.

2014-2015 2013-2014

Building and other Constructions 2.5% 2.5%

Plant, Machinery & Equipments 5% 5%

Vehicles 10% 10%

Furniture & Fixtures 10% 10%

Sundry Assets 10% 10%


10.03. Impairment of Assets

In accordance with the provisions of BAS 36 : Impairment of Assets, the carrying amount

of non-financial assets, other than inventories are reviewed at each reporting date to

determine whether there is any indication of impairment. If any such indication exists,

then the assets recoverable amount is estimated and impairment losses are recognized in

Profit and Loss Account. No such indication of impairment has been observed till to date.

10.04. Revenue Recognition

In compliance with the requirements of BAS 18 : Revenue, revenue from receipts from

customers against sales is recognized when products are dispatched to customers, that is, when

the significant risk and rewards of ownership have been transferred to the buyer, recovery of

the consideration is probable, the associated costs and possible return of goods can be

estimated reliably, and there is no continuing management involvement with the goods.

Revenue from sales is exclusive of VAT.

10.05. Inventories

Inventories comprise of Raw Materials, Work-in-process, Finished goods, Stores &

Spares and Materials-in-transit. Raw Materials and Stores and Spares have been valued at

average cost. Materials-in-transit have been valued at the cost incurred upto the date of

Balance Sheet. Work-in-process have been valued at prime cost basis as required by

BAS-2 with proportionate addition of Factory Overheads. Finished goods have been

valued at the lower of cost and net realizable value basis.

10.06. Income Tax-Current Tax

The Company qualifies as a “Publicly Traded Company” as per income tax law and

therefore provision for income tax has been made at the existing rate of 27.5% on

business income with due consideration of rebate allowable on profit attributable from

export (as applicable).

10.07. Cash and Cash Equivalents

Cash in hand and cash at banks have been considered as cash and cash equivalents for the

preparation of these financial statements, which were held and available for use by company

without any restriction and there was insignificant risk of changes in value of the same.

10.08. Cash Flow Statement

Cash flow statement is prepared principally in accordance with BAS-7 “Cash Flow

Statements” and the cash flows from the operating activities have been presented under

Direct method as required by the Securities and Exchange rules 1987 and considering the

provisions of paragraph-19 of BAS-7 which provides that “Enterprises are Encouraged to

Report Cash Flow from Operating Activities Using the Direct Method”.

10.09. Transactions in Foreign Currencies

Transactions in foreign currencies are converted into Bangladesh Taka at the exchange rate

ruling on the date of Balance Sheet. Any gain/loss in foreign currency transaction is

recognized as gain/loss from foreign currency transaction in the profit and loss account.


10.10. Borrowing Costs

Finance Cost (Borrowing Costs) incurred during the year was recognized as revenue

expenses, except for IDCP which has been capitalized with due consideration of BAS-23.

10.11. Leases

The lease is classified as an operating lease.

Lease payments are recognized as finance cost in the income statement.

10.12. Earning Per Share (EPS)

The company calculates Basic Earnings per share (EPS) in accordance with the

Bangladesh Accounting Standards (BAS-33). Diluted earning per share is not applicable

for the Company as it has no such convertible securities.

10.13. Reporting Period

The financial period of the company covers one fiscal year from 1st July to 30th June Consistently.

11.00. PROPERTY, PLANT & EQUIPMENT: TK. 2,154,086,548

The movement in property, Plant & equipment is as under :

C O S T DEPRECIATION Written

Particulars Balance Addition Balance Balance Charged Balance down Value

as on during as on as on during Rate as on as on

01.07.2014 the year 30.06.2015 01.07.2014 the year 30.06.2015 30.06.2015

AT COST

Land & land development 26,527,530 - 26,527,530 - - 0.00% - 26,527,530

Building and other

construction

236,862,165

-

236,862,165

171,953,610

1,622,714

2.50%

173,576,324

63,285,841

Plant, machinery

and equipment

816,665,875

8,721,637

825,387,512

621,203,595

10,209,196

5.00%

631,412,791

193,974,721

Lease Plant, machinery 91,905,283 - 91,905,283 10,112,445 4,089,642 5.00% 14,202,087 77,703,196

Vehicles 1,329,166 - 1,329,166 1,265,975 6,319 10.0% 1,272,294 56,872

Furniture and fixtures 9,543,256 - 9,543,256 7,316,420 222,684 10.0% 7,539,104 2,004,152

Sundry assets 4,794,800 30,084,337 34,879,137 4,159,835 3,071,930 10.0% 7,231,765 27,647,372

Sub Total : 1,187,628,075 38,805,974 1,226,434,049 816,011,880 19,222,485 835,234,365 391,199,684

AT REVALUATION :

Land & land

development 1,154,722,470

- 1,154,722,470

- - 0.0%

-

1,154,722,470

Building and other

construction 203,500,193

- 203,500,193

5,087,505

4,960,317 2.50%

10,047,822

193,452,371

Plant , machinery

and equipment 459,514,707

-

459,514,707

22,975,735

21,826,949 5.00%

44,802,684

414,712,023

Sub Total : 1,817,737,370 - 1,817,737,370 28,063,240 26,787,266 - 54,850,506 1,762,886,864

Total as on 30.06.2015 : 3,005,365,445 35,520,652 3,044,171,419 844,075,120 46,009,751 - 890,084,871 2,154,086,548

Notes :

1) The rate and basis of depreciation are stated in note 10.02.

2) Depreciation has been apportioned as below : 30.06.2015 30.06.2014

Conversion cost (Note : 29.1.2) 45,780,748 16,256,696

Administrative expenses (Note : 30.00) 222,684 317,978

Selling and distribution expenses (Note : 31.00) 6,319 7,021 ----------------- ------------------

Taka 46,009,751 16,581,695 ========== ==========


11.01. Depreciation on Re-valuation: Tk. 26,787,266

Until last year depreciation on revaluation of assets has been shown in the statement of

changes in equity and deducted from the retained earnings, but this year the amount of

depreciation has been charged to statement of Comprehensive Income.

12.00. INVESTMENTS : TK 113,195,959

30.06.2015 30.06.2014

Investment in share (Note-12.01) 113,195,959 113,195,959 ------------------- -------------------

Taka 113,195,959 113,195,959 =========== ===========

12.01. Investment in shares represents the cost of 11,254,000 Ordinary shares of Tk.10.00 each

of Monno Fabrics Ltd. (MFL) an associated undertaking of the company.

13.00. INVENTORIES : TK. 333,780,837

Break-up of the amount is given below : 30.06.2015 30.06.2014

Raw & other auxiliary materials (Note-13.01 & 29.1.1) 123,201,883 99,841,605

Finished goods (Note-13.02 & 29.00) 45,360,978 59,279,870

Stores & spares (Note-13.03) 46,090,716 41,774,016

Work-in-process (Note-13.04 & 29.01) 102,166,128 129,547,781

Materials-in-transit (Note-13.05) 16,961,132 16,721,432

--------------- ---------------

Taka 333,780,837 347,164,704

========= =========

13.01. The raw & other auxiliary materials have been valued at average cost.

13.02. The finished goods have been valued at lower of cost and net realizable value basis.

13.03. Stores & spares have been valued at average cost.

13.04. The work-in-process have been valued at prime cost with proportionate addition of

factory overhead.

13.05. Materials-in-transit represents the cost incurred up to the date of Balance Sheet for

consignment which have subsequently been cleared.

14.00. TRADE & OTHER RECEIVABLE: TK. 142,648,497

The break-up and nature of receivable are given below: 30.06.2015 30.06.2014

Export bills receivable (secured) 90,255,433 85,848,477

Duty draw back (secured) 4,666,100 3,070,379

Parties/Institutions 47,726,964 57,178,059 ------------------- --------------------

Taka 142,648,497 146,096,915 =========== ===========

14.01. The amount due from parties/institutions are considered good and most of them have

been realized subsequently.

14.02. No amount was due from the directors (including Managing Director), managers and other

officers of the company and from any of them severally or jointly with any other person.


15.00. ADVANCES, DEPOSITS & PREPAYMENTS : TK. 297,895,682

This is made up as follows: 30.06.2015 30.06.2014 i) ADVANCES:

Advance against purchase/supplies (Note 15.01) 17,529,325 29,358,778

Advance income tax (Note 15.02) 144,218,805 130,971,667

Advance rent, rates & taxes 4,212,511 9,091,714

Other advances 109,433,686 71,586,705

275,394,327 241,008,864

ii) DEPOSITS:

Security deposits 8,944,704 7,782,844

Lease deposits 6,781,340 6,781,340

Value added tax 6,775,311 14,255,881

22,501,355 28,820,065

iii) ii) PREPAID INSURANCE - 1,363,260 ------------------ -------------------

Taka 297,895,682 271,192,189 =========== ===========

15.01. This represents the amount paid to different suppliers against purchase of raw and other

auxiliary materials. Such advances were made in the normal course of business where no

collateral security is required. The entire amount has been adjusted subsequently.

15.02. ADVANCE INCOME TAX : TK. 144,218,805

This is made-up as follows: 30.06.2015 30.06.2014

Opening Balance 130,971,667 116,522,650 Add.: Addition During the Year 13,247,138 14,449,017 ------------------ -------------------

Taka 144,218,805 130,971,667 ========== ===========

16.00. CASH AND CASH EQUIVALENTS :TK. 9,056,007

This is made-up as follows: 30.06.2015 30.06.2014

a. Cash in hand 464,021 2,928,575

b. Cash at banks 7,168,847 24,999,560

In current accounts 7,039,999 24,874,609

In STD accounts 128,848 124,951

c. Foreign currency retention account,

$ 11,772.55 & EURO 5,731.83 1,423,139 1,557,125 ----------------- -----------------

Taka 9,056,007 29,485,260 ========== ==========

16.01. The amount of cash in hand has been certified by the management.

16.02. The above bank balances have been confirmed and reconciled with respective bank statement

balances as on 30.06.2015. The above balances were held and available for use by the

company without any restriction.


17.00. SHARE CAPITAL

AUTHORIZED CAPITAL: 30.06.2015 30.06.2014

50,000,000 Ordinary shares of Tk. 10.00 each 500,000,000 500,000,000

========= =========

17.01. ISSUED, SUBSCRIBED & PAID UP CAPITAL: TK. 239,280,200

This represents : 30.06.2015 30.06.2014

90,00,000 Ordinary shares of Tk.10.00 each fully paid in cash. 90,000,000 90,000,000

1,12,50,000 Ordinary shares of Tk.10.00 each fully paid as bonus. 112,500,000 112,500,000

23,07,690 Ordinary shares of Tk.10.00 each fully paid issued in

exchange of share of Monno Jutex Industries Ltd. for amalgamation. 23,076,900 23,076,900

13,70,330 Ordinary shares of Tk.10.00 each fully paid issued in

exchange of share of Monno Printing & Packaging Ltd. for amalgamation. 13,703,300 13,703,300 _______________ _______________

Taka 239,280,200 239,280,200

========= =========

(a) The break-up of share holding is given below:

30.06.2015 30.06.2014

No.of shares % No.of shares %

Sponsors & Directors 12,953,378 54.13 13,353,378 55.81

Institutions 3,770,661 15.76 3,909,085 16.34

General public 7,176,357 29.99 6,578,935 27.49

Foreign investors 1,350 0.01 1,350 0.01

Non Resident investors 26,274 0.11 85,272 0.35 -------------- --------- -------------- ---------

Total 23,928,020 100.00 23,928,020 100.00 ======== ===== ======== =====

b) The distribution schedule showing the number of shareholders and their shareholdings

in percentage are as follows:

Range of holdings No. of shareholders No. of shares Holding %

In number of shares 30.06.2015 30.06.2014 30.06.2015 30.06.2014 30.06.2015 30.06.2014

1 to 499 6,430 7,319 798,505 1,021,663 3.34 4.27

500 to 5,000 1,944 1,821 1,903,586 2,570,438 7.96 10.74

5,001 to 10,000 79 106 462,687 726,186 1.93 3.04

10,001 to 20,000 39 48 538,651 577,283 2.25 2.41

20,001 to 30,000 13 17 228,549 399,529 0.95 1.67

30,001 to 40,000 9 9 320,130 316,101 1.34 1.32

40,001 to 50,000 3 2 133,300 82,450 0.56 0.35

50,001 to 100,000 7 8 618,672 650,694 2.58 2.72

100,001 to 1,000,000 22 13 4,969,317 3,223,353 20.77 13.47

Over 1,000,000 3 3 13,954,623 14,360,323 58.32 60.01

Total 8,549 9,346 23,928,020 23,928,020 100.00 100.00


(c) Mrs. Afroza Khan, Managing Director has transferred 4,00,000 (Four Lac) shares to her

son Mr. Rasheed Mymunul Islam during the year by way of gift with due approval for

the competent authority.

(d) Option on unissued shares:

There is no option regarding authorised capital not yet issued but can be issued to

increase the issued, subscribed and paid up capital through the issuance of new shares

against cash contribution and bonus.

(e) Market Price :

The Shares of the company are listed in the Dhaka Stock Exchange Ltd. and Chittagong

Stock Exchange Ltd. and quoted @Tk.24.80 and @Tk.24.10 per share respectively in the

Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. as on June 30, 2015.

18.00. REVENUE RESERVES & SURPLUS: TK. 2,036,552,575

The break-up of the amount is shown below : 30.06.2015 30.06.2014

Dividend equalisation reserve 21,700,000 21,700,000

General reserve (Note 18.01) 149,491,999 149,491,999

Capital reserve 9,081,550 9,081,550

Revaluation Reserve (Note 18.02) 1,762,886,864 1,789,674,130

Retained Earnings as of June 30, 2015 (Note 18.01) 93,392,162 68,580,980 --------------------- ---------------------

Taka 2,036,552,575 2,038,528,659 ============ ============

18.01. Details of the balance have been shown in the statement of changes in equity.

18.02. Revaluation Reserve Tk.1,762,886,864

Break-up of the amount is given below: 30.06.2015 30.06.2014

Opening Balance 1,789,674,130 1,817,737,370

Less: Depreciation on Revaluation of Assets (Note 11.00) 26,787,266 28,063,240 ---------------------- ----------------------

Closing Balance Taka 1,762,886,864 1,789,674,130 ============ ============

19.00. LONG TERM LOAN:Tk. 2,311,589

19.01 The break-up of the amount is given below : 30.06.2015 30.06.2015

Opening Balance 21,478,152 36,053,368

1,879,437 4,468,784

Add: Interest during the year (Note 32.00) 1,874,437 4,463,784

Bank Charge 5,000 5,000

Less: Paid during the year 21,046,000 19,044,000

Closing Balance Taka 2,311,589 21,478,152

19.02 The break-up of the amount is given below : 30.06.2015 30.06.2014

Balance as on 30.06.2015 2,311,589 21,478,152

Less : Current Portion which has been shown in current Liabilities. 2,311,589 16,744,000 ----------------- -----------------

Taka - 4,734,152 ========== ==========


19.03. Nature of Security of loans :

The above balance is with Sonali Bank Ltd., Local Office, Dhaka, A/C # 000238007519

and fully secured by first charge on the fixed assets of the company and personal

guarantee of the Directors.

19.04. Terms of repayment :

The loans are refundable in installments and the last installment was due on 30.06.2015,

which was paid on 30.07.2015.

19.05. Bank interest :

Bank interest on the above loan has been charged in Statement of Comprehensive Income as

financial charges.

19.06. Current portion of the above loan has been shown under the head current liabilities as

required by BAS.

20.00. DEFERRED LIABILITY: TK. 11,863,330

The above amount represents liability on account of Gratuity as on 30.06.2015 but

calculated upto 31.08.2007. This has been calculated on the basis of one month's basic pay

(last drawn) for each completed year of service in respect of permanent employees who

have completed 10 years of service as on 31.08.2007. Gratuity has been discontinued as per

management decision and therefore no provision has been made during the current year.

21.00. SHORT TERM BORROWINGS: TK. 430,469,590

The balance includes working capital loan of Tk. 358,643,743 taken from Sonali Bank

Limited, Local office, Dhaka, and Mercantile Bank Ltd. Main Branch Dhaka which is

secured by first charge on stock in trade and collateral security on the fixed assets of

the company. The rate of interest applicable on the loan is governed by the interest

policy of the Bank and subject to change from time to time which is being applied on

quarterly rest. The balance amount of Tk. 71,825,847 was received from Uttara Finance

and Investment Limited as short term loan.

22.00. LONG TERM LOAN (Current Portion): TK. 2,311,589

Current portion of long term loan has been shown under the head Current Liabilities

which is payable within June-2016.

23.00. TRADE & OTHER PAYABLES: TK. 101,689,557 Trade & Other payables represent the Bills Payable against Materials to third parties

Tk.83,106,188 which has been paid subsequently and Tk.18,583,369 payable to sister concerns.

24.00. ACCRUED EXPENSES: TK. 20,771,338

This is in-respect of: 30.06.2015 30.06.2014

Gas bill - 4,205,728

Salaries & Wages payable 20,079,426 19,795,843

Audit Fees 100,050 86,250

Others 591,912 531,261 ----------------- -----------------

Taka 20,771,388 24,619,082 ========== ==========

The above amounts were provided as on 30.06.2015 and majority of the amount were

paid subsequently.


25.00. UNCLAIMED DIVIDEND: TK. 11,699,095

The above amount represents dividend warrants issued to different shareholders but not

presented to the bank for encashment upto the date of balance sheet.

26.00. PROVISION FOR INCOME TAX: TK. 28,130,724

The balance is arrived at as follows: 30.06.2015 30.06.2014

Opening Balance 26,489,909 25,500,616

1,640,815 989,293

Add. Provision for the Year (Current) 1,140,815 989,293

Add. Provision for the Year (Deferred) 500,000 -

Taka 28,130,724 26,489,909

26.01. Income tax assessment has been finalized upto Financial year 2011-2012.

26.02. Income Tax case is pending in the High Court for final settlement of assessed Income Tax

for assessment year 2001-2002.

26.03. Provision for deferred tax has been made on lump sum basis.

27.00. LIABILITIES FOR OTHER FINANCE: TK. 167,895,482

This is arrived at as follows: 30.06.2015 30.06.2014

Security deposit 16,955,938 16,865,938

WPPF & WF 6,160,608 5,925,048

Tax deducted at source against supply of goods/services 1,738,719 1,907,054

VAT deducted at source against supply of goods/services 171,550 90,494

Tax deducted from the salary of employees for June-2015 114,150 487,850

Amount payable to shareholders against sale-proceeds

of right issue of shares 3,000 3,000

Temporary loan Received from Monno Power Generation

& Distribution Ltd. 3,916,515 13,266,515

Temporary loan Received from Monno Bone China Ltd. 12,727,830 32,727,830

Temporary loan Received from Mrs. Afroza Khan 7,022,000 7,022,000

Lease Rental Payable & Int. on UFL & ULC 119,085,172 119,085,172

------------------ -------------------

Taka 167,895,482 197,380,901 ========== ===========

28.00. NET REVENUE : TK. 757,385,343

This is made up as follows : 30.06.2015 30.06.2014

A. Local Sales (Net local sales) 367,934,619 415,302,423

B. Export Sales (Net export sales) 380,140,556 277,125,207

C. Duty Drawback against Export 9,310,168 - ------------------- -------------------

D. Total Net Sales (A+B+C) Taka 757,385,343 692,427,630 =========== ===========


29.00. COST OF GOODS SOLD : TK. 617,334,682

This is made up as under : 30.06.2015 30.06.2014

Opening stock of finished goods 59,279,870 50,673,273

Add: Cost of production (note 29.01) 603,415,790 532,253,056 ------------------- -------------------

Total 662,695,660 582,926,329

Add: Purchase of finished goods (Monno Bone China) - 22,561,913 ------------------- -------------------

662,695,660 605,488,242

Less: Closing stock of finished goods (note 13.00) 45,360,978 59,279,870 ------------------- -------------------

Cost of goods sold Taka 617,334,682 546,208,372 =========== ===========

29.01. COST OF PRODUCTION : TK. 603,415,790


Opening work-in-process 129,547,781 117,609,279

Add: Raw & other auxiliary materials consumed

during the year (Note : 29.01.1) 276,034,901 294,623,639

Add : Conversion cost (Note : 29.01.2) 299,999,236 249,567,919 ------------------- -------------------

Total 705,581,918 661,800,837

Less: Closing work-in-process (Note : 13.00) 102,166,128 129,547,781 ------------------- -------------------

Cost of production Taka 603,415,790 532,253,056 =========== ===========

29.01.1. RAW & OTHER AUXILIARY MATERIALS CONSUMED : TK. 276,034,901


Opening stock 99,841,605 83,260,390

Add : Purchase during the year 299,395,179 311,204,854 ------------------- -------------------

399,236,784 394,465,244

Less : Closing stock (Note : 13.00) 123,201,883 99,841,605 ------------------- -------------------

Raw & other auxiliary materials consumed during the year Taka 276,034,901 294,623,639 =========== ===========


29.01.2. CONVERSION COST:TK. 299,999,236

This consists of the followings : 30.06.2015 30.06.2014

Salaries & wages 129,805,836 116,844,051

Consumable stores & spares 45,815,462 31,196,942

Office stationary expenses 303,063 287,982

Insurance 4,245,869 4,244,040

Gas consumption 47,158,743 53,205,412

Electricity charges 25,579,926 26,364,989

Oil & lubricants 656,686 735,684

Welfare expenses 99,939 90,553

Uniform & liveries 23,450 12,253

Traveling & conveyance 224,300 125,111

Postage, telegram & telephone 88,818 104,265

Entertainment expenses 133,807 59,951

General expenses 82,589 39,990

Depreciation (note-11.00) 45,780,748 16,256,696 ------------------- -------------------

Taka 299,999,236 249,567,919 =========== ===========

30.00. ADMINISTRATIVE EXPENSES: TK. 47,454,061

This is made up as under : 30.06.2015 30.06.2014

Salaries & allowances 26,650,043 23,127,020

Repairs & maintenance 1,570,273 1,729,883


Power & fuel 3,168,190 2,540,442

Welfare expenses - 3,000

Rent, rates & taxes 2,400,000 1,502,493

Traveling & conveyance 2,589,954 2,399,775

Postage, telegram & telex 1,379,824 1,368,106


Auditors remuneration 100,050 86,250

Membership fees & Subscription 694,596 572,385

Advertisement & publicity 238,408 347,874

Directors emolument 6,700,000 6,700,000

A G M expenses 316,250 239,267

Books & periodicals 37,334 41,979

Donation 170,000 43,331

Uniform & liveries 89,080 168,560


Depreciation (Note-11.00) 222,684 317,978 ----------------- -----------------

Taka 47,454,061 42,461,414 ========== ==========


31.00. SELLING & DISTRIBUTION EXPENSES : TK. 36,859,258

This consist of as follows: 30.06.2015 30.06.2014

Salaries & allowances 15,850,184 16,599,037

Repairs & maintenance 383,246 220,310


Power & fuel 493,022 479,412

Rent, rates & taxes 7,720,066 8,156,814

Traveling & conveyance 671,243 596,597

Postage, telegram & telex 255,504 210,636


Fair & exhibition 2,903,445 542,390

Sample expenses for export 3,669,468 3,069,321

Delivery charges 3,153,171 2,849,980


Showroom expenses 1,022,000 1,052,090

Depreciation (Note-11.00) 6,319 7,021 ----------------- -----------------

Taka 36,859,258 34,438,540 ========== ==========

32.00. FINANCE COST: TK. 50,790,590

This is made up as follows: 30.06.2015 30.06.2014

Interest on long term loan (Note-19.01 ) 1,874,437 4,463,784

Interest on cash credit (Note-32.01 ) 45,987,309 59,476,452

Bank charges 2,928,844 1,668,702 ------------------ -------------------

Taka 50,790,590 65,608,938 =========== ===========

32.01. Interest on cash credit : Tk. 45,987,309

The above balance is made up as follows: 30.06.2015 30.06.2014

Interest on cash credit 45,987,309 48,134,249

Rent installment on lease of Machinery Equipments,

Pre -Fabricated Steel Building with Accessories & Vehicles - 11,342,203 ---------------- -----------------

Taka 45,987,309 59,476,452 ========== ==========

33.00. CONTRIBUTION TO WORKERS PROFIT PARTICIPATION FUND AND WELFARE FUND: TK. 235,560

This represents 5% of net profit after charging such contribution and which is provided as

per Labour Act, 2006 and is payable to workers as defined in the said Act..


34.00. BASIC EARNINGS PER SHARE :TK. 0.13

The computation of EPS is given below: 30.06.2015 30.06.2014

(a) Earnings attributable to the Ordinary

Shareholders (net profit after tax) 3,070,377 2,544,389

(b) No. of Ordinary Shares as on 30.06.2015 23,928,020 23,928,020 ---------------- ----------------

(c) Basic EPS Taka 0.13 0.11 ========= =========

35.00. PAYMENTS/PERQUISITES TO DIRECTORS AND OFFICERS

The aggregate amount paid/provided during the year in respect of Directors and Officers of

the company as defined in the Securities and Exchange Rules 1987 are disclosed below :

Directors / Officers Remuneration Etc.

Particulars Directors Officers

2014-2015

Directors’ Remuneration 4,200,000 -

Managerial Remuneration - 3,696,000

Bonus 700,000 616,000

Perquisites:

Housing 1,680,000 1,848,000

Medical allowance - 369,600

Conveyance allowance - 369,600

Entertainment allowance 120,000 369,600

Directors/Officers Remuneration Etc. (2014-2015) Taka 6,700,000 7,268,800

Directors/Officers Remuneration Etc. (2013-2014) Taka 6,700,000 6,608,000

During the year under review:

(a) No compensation was allowed by the company to the Managing Director of the company.

(b) No Board meeting attendance fee was paid to the directors of the company.

(c) No amount of money was spent by the company for compensating any member of the

Board for special services rendered, other than those mentioned.

36.00. RELATED PARTY

The nature of transactions and their total value have been set out in accordance with the

provisions of BAS 24 “Related Party Disclosures” as follows :

Particulars Nature of

Transactions

Amount

Monno Power Generation & Distribution Ltd. Services Sold 25,579,926

Various Party (Sister Concern) Trade & Other Payables 18,583,369

Monno Power Generation & Distribution Ltd. Temporary Loan 3,916,515

Monno Bone China Ltd. Temporary Loan 12,727,830

Mrs. Afroza Khan Temporary Loan 7,022,000

The above transactions took place at arms length basis and bills were raised and settled in due time.


37.00. FOREIGN INVESTORS

37.01. As on the date of Balance Sheet there were 2 Foreign shareholders whose total

shareholdings were 1,350 shares.

37.02. No dividend is paid in foreign currencies. However dividend to the foreign investors are

paid in local currency through their local custodian bankers.

38.00. PRODUCTION CAPACITY AND ACTUAL PRODUCTION

The position noted below represents production capacity of Porcelain tableware on 2/3 shift basis

Description 2014-2015 % 2013-2014 %

Production capacity (in million pieces.) 22.00 - 22.00 -

Actual Production (in million pieces.) 14.65 66.59 13.57 61.68

During the year under review the Company operated keeping in view the market demand for its products.

39.00. CONTINGENT ASSETS / LIABILITIES

There was no contingent liability as on 30th June, 2015 and there was no claim against

the company not acknowledged as debt as on 30.06.2015

40.00. CREDIT FACILITY NOT AVAILED

There was no credit facilities available to the Company under any contract but not availed

of as on 30.06.2015 other than trade credit available in ordinary course of business.

41.00. CAPITAL EXPENDITURE COMMITMENT

There was no capital expenditure commitment of the company as of 30th June, 2015.

42.00. FOREIGN EXCHANGE EARNED

Export of goods calculated on FOB basis is US$ 5.03 million.

Other income is nil.

43.00. PAYMENTS IN FOREIGN CURRENCY

For Raw & Other auxiliary materials US$ 2.4908 million.

For Stores & Spares US$ 0.2965 million.

44.00. VALUE ADDITION: TK. 506,808,478

During the year the company made the value-addition of Tk. 506,808,478 which has been shown below:

Particulars 2014-2015 %

Turnover & Other Income 757,385,343 -

Bought-in-Materials & Services (250,576,865) - ------------------- ----------

Value Added Taka 506,808,478 - =========== ======

Applications:

Duties & Taxes to Government Exchequer 20,638,679 8.24

Salaries and Benefits to Employees 179,006,063 71.44

Interest to Lenders 47,861,746 19.10

Retained by the Company 3,070,377 11.23

--------------- ---------

Total : Taka 250,576,865 100.00

========= =====


45.00. MANPOWER

As on 30th June, 2015 the total number of employees working in factory as well as Head

Office of the company was 2,160.

46.00. WPPF & WF POLICY

The company has a "Recognized" Workers Profit Participation Fund & Welfare Fund.

These funds are controlled and managed by separate Trustee Board.

47.00. GENERAL EXPENSES

General Expenses Account does not include any individual head of expenditure as

exceeds 1% of the total revenue expenditure or Tk. 5,000 whichever is higher.

48.00. EVENT AFTER THE BALANCE SHEET DATE

Subsequent to the Balance Sheet date, the Board of Directors recommended in it's

meeting held on October 27, 2015 for payment of 5% cash dividend to the

shareholders on Paid up Capital out of reserve and surplus available for distribution

at the end of the year 2015, which is subject to the approval of the shareholders in the

ensuing Annual General Meeting of the company.

49.00. INTERNAL CONTROL

Following steps have been taken for implementation of an effective internal control

procedures of the company :

(a) A strong internal control and compliance division has been formed with a view to

establish a well designed system of internal control.

(b) Regular review of internal audit report with a view to implement the suggestion of

internal auditors in respect of internal control techniques.

(c) To establish an effective management systems that includes planning, organizing and

supervising culture in the factory as well as at Head office.

SD/- SD/- SD/-

MD.EKRAMUL HOQUE AFROZA KHAN H. R. KHAN

COMPANY SECRETARY MANAGING DIRECTOR CHAIRMAN

Dhaka,

Dated : October 27, 2015

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